Student Well-Being & Movement

U.S. to Trim School Medicaid Payments After Freeze

By Christina A. Samuels — January 04, 2008 3 min read
  • Save to favorites
  • Print

The Bush administration has followed through on a proposal to stop reimbursing schools for certain services provided to Medicaid-eligible students, but school groups say they plan to use the six months before the new rules go into effect to fight the changes.

The Centers for Medicare and Medicaid Services plans to halt the reimbursements for the costs of transporting eligible children from home to school and back. School districts contend they are entitled to those transportation expenses when Medicaid-eligible services such as speech or physical therapy are provided at school.

Medicaid would also stop paying school administrative costs for identifying and enrolling Medicaid-eligible students, and for coordinating the provision of medical services covered under a state’s Medicaid plan.

The changes were announced Dec. 21, the Friday before Congress and many school districts went on break before the winter holidays. However, before Congress wrapped up its session for the year, it approved the Medicare, Medicaid, and SCHIP Extension Act of 2007, which includes a provision that freezes the implementation of the new reimbursement rules until June 30. President Bush signed the bill Dec. 29.

“What’s great is that we have the moratorium,” said Kathleen Cummins Merry, the director of Medicaid services for Michigan’s Wayne County Regional Education Services Agency, which provides special education services to 34 school districts, including Detroit. “We’re going to continue to work with our congressional delegations to see what can be done about extending the moratorium, or get legislation introduced to stop the changes.”

The Centers for Medicare and Medicaid Services, or CMS, a branch of the Department of Health and Human Services, proposed the changes last August. The centers estimated that eliminating certain reimbursements would save the federal health-insurance program for the poor an estimated $635 million in its first year of implementation, and $3.6 billion over five years. (“U.S. Proposes to Trim School Medicaid Funding,” Sept. 12, 2007).

The revised policy will ensure that Medicaid is not paying for expenses that should properly be borne by other agencies, or that are inappropriate for a health-care program, the CMS has said. The final rule was published in the Federal Register on Dec. 28.

Response to Comments

The Medicaid agency was unconvinced by those who criticized the proposed rule change during a 60-day comment period. In its analysis of the comments, CMS said that district complaints about the loss of money bolstered the agency’s opinion that money is being spent inappropriately on non-Medicaid services.

For example, some commenters said that the loss of funds would mean cuts in electives, after-school activities, and music programs.

“Constrained local and state funding for education is not the basis for deciding whether a cost is properly claimed under Medicaid,” the agency said in its comments accompanying the final rule. “We believe the final rule is necessary to maintain the financial integrity of the Medicaid program.”

The CMS has a “complete misunderstanding” of how school districts operate, said Mary Kusler, the assistant director of government relations for the American Association of School Administrators, based in Arlington, Va.

The Medicaid agency forgets that its money is reimbursing school districts for dollars that have already been spent, and will continue to be spent, on Medicaid-eligible services, Ms. Kusler said. The reimbursement is then used to pay for other school services.

“We are using their money to plug the hole,” she said.

The fact that the six-month moratorium was included in a larger bill relating to Medicaid is a sign of legislative support for allowing schools to claim certain reimbursements, Ms. Kusler said.

“We’re not going to give up,” said Ms. Merry, the Michigan official. “I look at this as an absolute entitlement.”

A version of this article appeared in the January 09, 2008 edition of Education Week as U.S. to Trim School Medicaid Payments After Freeze

Events

Early Childhood K-12 Essentials Forum Early Childhood Education: Building Essential Skills for Success
Join this free virtual event to examine the biggest challenges in supporting young children, from preschool through elementary school. 
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Absenteeism Webinar
Attendance Isn't an Attendance Problem
Boost attendance by strengthening relationships, belonging, and support with practical strategies from Doug Fisher & Nancy Frey.
Content provided by Corwin
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
School & District Management Webinar
The Principal's Role in Collective Efficacy and Student Outcomes
Learn practical strategies that help principals translate their confidence into stronger collective teacher efficacy and student outcomes.
Content provided by Otus

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Student Well-Being & Movement How a School Bus Will Serve as a Sensory Reprieve for Little Learners
A rural Head Start program will deploy the bus to give young kids tools to manage their emotions.
4 min read
HB A4346
An activity table inside the Pocono Services for Families and Children's new sensory bus on Aug. 20, 2026, in East Stroudsburg, Pa. The bus is set to hit the road this spring to help teach young students how to regulate their emotions through play.
Hannah Beier for Education Week
Student Well-Being & Movement Q&A What's Next for SEL? A Conversation With the Field's New Chief Champion
One of the nation's most prominent groups promoting social-emotional learning has a new leader.
5 min read
An 8th grader works on a class project at Paw Paw Middle School on Dec. 2, 2021, in Paw Paw, Mich. The students were asked to write a word that was important to them and their work in the classroom. They then added the words to a poster to serve as a class "contract." The district has upped its social-emotional curriculum during the pandemic, as more students struggle.
An 8th grader works on a project as part of a social-emotional learning curriculum at Paw Paw Middle School in Paw Paw, Mich., on Dec. 2, 2021. The new CEO of one of the nation's most prominent organizations promoting social-emotional learning says academics alone aren't sufficient to help kids thrive in an increasingly complex world.
Martha Irvine/AP
Student Well-Being & Movement How Growing Up in a Digital World Affects Kids' Academic and Social Skills
Psychologists weigh the benefits and drawbacks of adolescents' tech use.
4 min read
A student checks their cellphone after classes end for the day at Oak-Land Middle School in Lake Elmo, Minnesota on Wednesday, Aug. 20, 2025 . Oak-Land is part of the Stillwater Area Public Schools District , where officials decided in March to adopt a phone-free school day policy starting this school year. All schools in the district, which started their school year this week, are phone- and device-free for all students pre-K to 12 from the first bell of the day until the last. The new policy, which covers phones, earbuds, smartwatches and other personal devices, applies to instructional time, lunch periods, recess, school-sponsored programs, events or activities, or any other time during the designated school day.
A student checks a cellphone after classes end at Oak-Land Middle School in Lake Elmo, Minn., on Aug. 20, 2025. Psychologists see lots of downsides to the overuse of technology among adolescents.
John Autey / Pioneer Press via TNS
Student Well-Being & Movement School Vaccination Rates Inch Down Yet Again and Exemptions Reach Record High
The United States is in the midst of its worst measles outbreak since 1991.
3 min read
A child receives a vaccination while her mom holds and comforts her at Larchmont Pediatrics in Los Angeles on March 25, 2025. New federal data show that U.S. kindergarten vaccination rates inched down again last year and the share of children with exemptions rose to an all-time high.
A child receives a vaccination while her mom holds and comforts her at Larchmont Pediatrics in Los Angeles on March 25, 2025. New federal data show that U.S. kindergarten vaccination rates inched down again last year and the share of children with exemptions rose to an all-time high.
Allen J. Schaben/Los Angeles Times via TNS